Dirt Cheap Outsourcing vs. Premium Outsourcing

In their desire to cut expenses on their operations, U.S. based Company signed up Company Y as an outsourced firm to take care of their non-core operations – ranging from customer service and accounting back office tasks. Company Y is based somewhere in India and offers a very low price for their outsourcing services. Not long until six months pass, U.S based Company decided to axe the outsourcing contract after careful consideration of the outcome of their partnership on account of volumes of issues U.S. based Company suffered from outsourcing to a cheap outsourcing provider.

Company X is only one of the many companies who have suffered from setbacks of getting the service of dirt cheap outsourcing companies. For the sake of the uninitiated, dirt cheap is often defined as the rate of the service an outsourcing company in low cost country charge a client, which can go five or more times lower than the usual rate to outsource to a high-end service provider..

For example, outsourcing a visual design or graphic design can be quite costly when done by a reputable digital agency but the cost can go a lot cheaper when the project is entrusted to a dirt cheap company. Do you consider a web design for only less than $100 very cheap? Yes? A wise move?

We’ll sure say no when you will be paying for another set of contractor to re-do the unfinished business or redesign a sloppy website design done the dirt cheap way!

Well, of course you can encounter a few success stories pointing they have been at the receiving end of successful outsourcing partnership with companies offering quite expensive and cheap services. Their ratio is significantly smaller over the massive number of complaints about the terrible experiences of clients with dirt cheap outsourcing service, however.

Disadvantages of Dirt Cheap Outsourcing

Yes, you can save a lot with this type of outsourcing service. And yes you can score reliable people working for a very low price – but everything is up to chance and this type of risk is a no-no in running a company. The following are the potential risks that companies might encounter upon working with dirt cheap outsourcing services:

  • Sloppy Works – Let face it, we get what we paid for. So if you paid under $5 for a logo design work, don’t be surprised to get an amateurish, sloppy design. Sure, you may shout and hate the virtual worker all you want but that’s not going to change everything unless you change ship asap to a provider of high quality output.
  • Copycat Works – Related to the No. 1 risk but even more sinister as this involves you possibly facing court hearings, Yes, your enthusiasm in getting the work done for a cheap price might eventually cost you legal issues. Since the service rate is very cheap, outsourced workers have limited budget to conduct copyright or trademark research. Thus, the tendency is for them to use available materials and alas, some of those may actually already have copyright owners.
  • Communication Woes – Offshore companies usually employ workers with English as their second language. Some cheap offshore companies cannot provide programs that can enhance the communication proficiency skills of their employees so much so of their customers’ culture. The downside of this is that when workers are given complex and complicated instructions, hardly there is understanding or a complete grasp of the instructions. This, in turn, could affect how they perform their tasks, which can lead to an outcome that is detached from their clients’ expectations.
  • More Time Wasted – There are offshore companies that employ remote staff, who may be working either at home or coffee shops. The setup leaves workers unmonitored and distracted if they do not have a feasible environment for working. While there are honest and efficient workers who can thrive in such setup, there are some who are inefficient and can a sloppy output due to their work environment.
  • More Revision – Since the outcome of work often go unsatisfactory with cheap outsourcing service, clients seek a couple revisions even for a single task, which can cause delay as against the projected deadline of a project. Also, some dirt cheap companies set off limits with regard to the allowable number of revision request to justify the cheap rate. As a result, the client has no choice but to accept the final revision regardless of the quality made or else they have to make new order.

Advantages of Premium Outsourcing

Furthermore, companies can enjoy significant benefits by getting the service of premium outsourcing companies. These benefits include the following:

  • Competent Workers – Premium outsourcing companies not only scout and recruit high-level staff, they have the capability to provide trainings to their workers in relation to the requirements of their clients.
  • Contingency Ready – Since they charge higher for their services, premium outsourcing companies would never let their reputation go downhill. Part of their resolve is to ensure they have contingency plans set to ensure that any risk of unexpected issues are covered.
  • Guaranteed High Quality – From headhunting to recruitment, premium outsourcing companies look for the cream of the crop of the workforce to provide their clients. Hires are not only selected based on their skillsets and qualifications, but also how they can confidently meet the required educational and trainings.
  • Efficient workers – Premium outsourcing companies have the means, technology and the system to monitor their workers perform their work for their clients. Programs to ensure workers are motivated and works efficiently are also implemented, apart from the above average salary and compensation given them.

A Few More Thoughts

To avoid common outsourcing disasters, it is highly recommended that companies don’t get tempted by the ground zero rates offered by dirt cheap outsourcing companies. While it is also true that some outsourcing firms that offer higher premiums do not deliver either, here is where you should consider well your options.

Let’s do the math. When you compare the price set by premium companies with their service, you can still find that they charge you higher because you are eased with the worries of having to pay the stipulated basic salary and compensation packages that you would otherwise pay when you hire a local worker or an agency based in your country.

Investing in a premium outsourcing company based in the Philippines with a solid reputation, you can still save more than half the amount that you will pay an in-house employee or team.

Is premium outsourcing service expensive? Yes, but it is worth the price. This will have to depend on how you maximize and optimize your use of outsourcing to get the best value out of your investment.

Discussing the benefits of employing premium outsourcing service can be endless yet the advantages presented above are enough for now to make you consider outsourcing with common sense.

At Big Outsource we offer premium services for any of your outsourcing work needs without compromising quality. We understand the value of work needed for the value of your money.